7 Wicked Ecommerce Applications of Shopping APIs

Ever wonder how Facebook Timeline and Twitter apps like Hootsuite and Klout are made possible? These social networks have made their APIs public (application programming interfaces), enabling developers to access their content and data in order to build their own unique experiences. In turn, these apps drive more traffic and usage to the social platforms, ensuring their long-term success (at least for the foreseeable future). Some APIs are even monetized. Google Maps is a “freemium” API, API access is free if the application built will be free for all users, or licensed if the end-product will be itself monetized by the developer. Then there are ecommerce APIs, or shopping APIs.

According to Forrester Research: A Shopping API is “a way of describing the exposing of core content and commerce functions in a programmatic way, over the Internet, for use either internally or by exposing to third parties. A Shopping API includes the ability to place orders.”

7 Examples of Shopping APIs in the Wild

Tesco APIFoodie.fm, a personalized grocery shopping app, uses Tesco’s API to build its Apple and Facebook apps — an example of a 3rd party leveraging a shopping API.

And of course, Tesco’s South Korean subway experience. Using mobile phones and QR code readers, commuters can grocery-grab on their way home without ever visiting the supermarket. An example of an internal use of the API.

Shoppers can answer quiz questions, listen to lullabies and download their lyrics, hover over hotspots and access customer reviews and social sharing tools. This is not your grandmother’s baby catalog.

Search and compare prices, and access detailed information in or out of store.

Marketplace APIs

Outrightis a freemium small business accounting software program that connects easily with PayPal, Etsy, Amazon and eBay.

Using APIs, Outright can call in sales, tax, shipping and other expense data directly from marketplaces and PayPal.

Verizon Wireless Verizon is planning to allow both developers and consumers to take advantage of its upcoming “turbo charge” API. Network customers can tap into extra bandwidth to power their smartphone apps during times of high network congestion through a microtransaction API. For example, if a Skype call starts breaking up, the user can make a small payment to improve it. The catch is the app must also use the API to enable the turbo option.

Nike

Nike’s FuelBand records biometrical data while you exercise and syncs it to your smartphone app to keep you on top of your fitness goals. Nike opened up its FuelBand API to developers to hack and mash up with music (announced at SXSW this year) — we’ll see what kind of wicked augmentations they come up with. Path and Nike have also teamed up to create features for sharing your favorite runs with friends.

Not only is opening up the FuelBand API to other developers great for branding, it creates demand for the $150 gadget. But the possibilities are endless.

Why think about APIs now?

FuelBand is just one example of new consumer products that will be increasingly connected, social and even commerce enabled. According to Forrester Research in 2010, 8 million American adults owned 8 or more connected devices in their home.

It’s undoubtedly even higher now. The Web is key channel to service and sell to customers, but it’s a maturing one. Consumer expectations for how to leverage their connected toys continue to increase. As consumers engage across wide variety of touchpoints, it becomes more complex for businesses to deliver great or even viral experiences, to market and extend the business leveraging that consumer’s network. And innovators are creating these high expectations. Amazon is the perfect example of how you can leverage APIs to deliver consistent, relevant experience across touchpoints including the Kindle. A “single view of the customer” allows account holders to see the same personalization and site content across channelstouchpoints.

How different industries use commerce APIs

Digital goods APIs support in-app purchases and upgrades, subscription management, and entitlements management. For example, TapTap Revenge allows users to buy more tracks within the game. In many cases, a shopping API can be used to do much the same thing, instead of using the iTunes platform.

Sports Illustrated and many others provide access to subscription content across multiple platforms, recognizing entitlements to view content. But as new platforms are continuously emerging, without a scalable solution like a commerce API, keeping up will be very difficult.

Retail

APIs make it easier and cheaper to deliver consistent pricing, offers, features and content across form factors (screen sizes), without the need to support each system with its own resources, and to integrate multiple touchpoints (mobile, mPOS, kiosks, digital signage, IPTV) into a single commerce engine more efficiently — with your own existing teams. Marketing and customer service can be supported more effectively, reducing the total cost of ownership for development and integration. For businesses selling through marketplaces, using APIs can be way to scale across multiple properties.

3rd party tools may be more costly than using your own shopping APIs, and don’t offer you the flexibility to innovate that using your own does. Ditto for social networks. Brick and mortar stores can use APIs to enable offline orders that are fulfilled in a traditional way to take place in the digital environment. Fulfillment systems can connect through APIs to enable drop-shipping direct from both warehouses and retail stores, increasing efficiency and availability of products.

We have seen application programming interfaces for many years. Essentially, what we’ve done in the past is take a technology platform, its user interface, the business and data logic, and rip off the user interface from the technology stack, and say the services underneath is really what the APIs are. Then you would put different technology layers on top of that that – a SOAP interface, or web services, REST, and say “let’s just manifest the services that are in the platform through these different technologies” and have this multi-channel access in. So in a mobile web interface, you’d have a mobile application calling those APIs. At Elastic Path, we tried to look at this by turning it on its head. Instead of looking at the services we offer in the platform, and manifesting those, we turn it around and ask “how are these services going to be consumed by the end user?” The reason we’re excited about this at Elastic Path is it enables what we refer to as “Elastic Commerce” – the frictionless, social, everywhere type of commerce that looks at the Internet of things, and the ability to weave commerce transactions into the context of life.

Forrester Research: The ecosystem has evolved to the point that APIs are core to business strategy. A business leader needs to think about APIs as a way to drive and extend their business. It’s not just about integrating 2 technologies together and leveraging APIs to do that in a programmatic and efficient way. What makes a shopping API different is it’s a productization of what APIs can do, and it becomes part of a business strategy moving forward. Think about a shopping API as an investment, and in itself a channel that can be utilized in a wide variety of ways to drive the business forward.

Which consumer devices are best positioned to benefit from a Shopping API?

Forrester Research:

Those that are best positioned are conventional Web as well as touchpoints like tablets and smartphones. Whether building out versions of your site or developing apps for them, the shopping API can enable a business to extend and embed commerce into wide variety of devices more easily. Digital display advertising, interactive TV and more futuristic applications, like appliances and cars represent what’s perhaps coming. It will change rapidly, but it’s hard to predict what will resonate the most. Commerce will become more increasingly embedded within the product itself. In order to “future proof your business,” here’s a good opportunity to think about how laying this foundation can enable you to adjust and adapt more quickly because you can expose more quickly and embed commerce within products and services.

From the consumer POV, how will they perceive the benefits of a Shopping API?

Sal Visca:

Consumers themselves won’t care so much that there’s a shopping API, they care about the end-user experience, and the fact that a shopping API can enable new forms of innovation. In my role, I talk about some of these silly examples like being able to order from a watch using near-field communication. The end-user doesn’t have to think too hard about going into a shopping experience, they’re just going about their day-to-day business and using different devices to interact with life. Whether they’re playing a game, or in a social context, it’s what’s enabled by underlying technology like a shopping API that can really support those new models.

Forrester Research: The consumer is looking for it to work, and for it to work on the next device that they own. They can’t understand why it wouldn’t work, or why there would be a problem transacting when they can elsewhere, and the bar is set higher and higher by their experiences with other companies. The shopping API is an important tool for the business to react to how things change, and enable them to work in a consistent and scalable way. You don’t want an offer on your tablet app that is no longer available because it is sold out. If you can’t keep your different consumer touchpoints in sync, you’re going to cause frustration and increase your customer service cost. Although customer doesn’t care, they do care about the quality of the end experience.

Can you describe how as a publishing company with multiple websites, we might capitalize on shopping APIs?

Sal Visca:

A shopping API enables new forms of consumption. So, if you have multiple sites with content, you can break up that content into more fine-grained components — maybe a chapter, maybe a complete book or volumes of books — whatever the granularity is, an API can now enable you to allow those to be consumed. E.g. if you’re reading a book, and you reach the end, you now have a promotion to buy the next version of it. Or, if you’re a law firm reading an article, and you need other case files, the recommendations we’re all familiar with in an ecommerce experience. An API allows the elasticity and flexibility to take your digital content and intellectual property, and package it up in different ways to be consumed in different ways.

How should we get started with a shopping API?

Forrester Research:

It’s easier to begin with product catalog as a way to begin working with APIs, and begin understanding how to establish that. Focus primarily on an existing project. For example, developing an app or mobile site is a great opportunity to take a step back and recognize that investing in APIs could establish that connection programmatically. It may take more time and money up front, but beginning that work now, leveraging an existing project, is going to pay dividends in the future. Another important issue to mention, APIs are not a project, they are a program. One mistake clients may make is thinking of the API as a project to launch, and moving on to the next project. They need to recognize that having someone from the business side as well as developers working on APIs as an ongoing program is critical to further developing them, leveraging them and supporting them, and providing a platform to grow the business on. It’s not a situation where you launch it and walk away, and sometime come back to it to do an upgrade.

Sal Visca: At Elastic Path, we’re all about agile development, learning, evolving and continually refining your usage. And in terms of getting started, we always recommend to start with a mobile app or web interface and try to call some of the different APIs, and see what you get back. It’s amazing, once you get started, it begins to enable new forms of innovation. This needs to be an ongoing process that you incorporate into your overall process. As we get new form factors and new devices, it’s important the API doesn’t require a large amount of understanding of the underlying system and all the objects that get touched during that process. It’s easy to slap on a REST interface or Java services, anyone can do that.

You talked about using shopping APIs to enable 3rd parties to integrate with our ecommerce platform. How about using shopping APIs for internal expansion, such as splitting the front-end from the back-end, putting the front-end on the cloud, and so on?

Sal Visca:

I was working at SAP, a very large software company, and we found we had to build APIs between internal components to ensure that we were building nicely architected, layered solutions. It’s amazing, if you put an API on a core set of services, it enforces a certain discipline on how internal development is done. And you become very componentized in your internal development, which is very key for not building old, monolithic systems, and enabling high adaptability to innovate and move quickly in the future, whether it’s a public or private API.

Forrester Research: Internal flexibility, and separating the front-end from the back-end is probably the most important value of an API strategy today. Exposing through 3rd parties is an interesting way that shopping APIs will continue to evolve, but the value proposition for businesses is about the increased flexibility internally.

What business models would be most effective at monetizing an API?

Sal Visca:

Obviously, you can get into transaction-based models where you’re providing Commerce-as-a-Service, which allows a vendor to put a product into a catalog and sell it to end consumers. You have a transaction price, and some percentage of that price. Those are models that we’re fairly familiar with. As we start to embed commerce in other applications, like a game — I have credits, I want to buy more ammunition, these kinds of things — there’s lots of micro-payment type models that come out of that.

Forrester Research:

A lot of it does depend on what types of products a company is selling, and what’s happening in their industry as a whole. For example, if you’re a software publisher, you’re probably feeling a lot of pressure at that $40-$50 price point. We’re increasingly seeing, whether it be a game or an application being sold at a lower initial price point, the carving up of different levels or features / capabilities of the application, which might increasingly be delivered as a service itself, and allow users to pay as you go or pay for increased capability or features within the product. Media companies have the opportunity to deliver cross-platform content, and take a direct role in the commerce that they want to do, not relying always on third party marketplaces for distribution. Bottom line, there will need to be a lot of experimentation, embedded and as devices continue to evolve, and integrated solutions within stores that can leverage ecommerce capabilities for “endless aisle” etc. Shopping API can help that occur much more efficiently than in the past.

What are some use cases of the Shopping API that couldn’t be done as easily with existing shopping methods?

Sal Visca:

If you’re in the retail space, when a customer is in-store and looking at a camera, using NFC and a touch pad can bring up generic information, reviews etc. A flexible API in the mobile shopping app can support that. In digital goods, it’s more around I’m watching video, and at the end I’m offered a promotion to buy the next episode — to get people while they’re consuming content. Having a flexible API that can be embedded in consumer applications would have been extremely difficult in the past, because you have to know so much about the underlying system, get back information in the mobile app and parse it, and deal with it. Now, you need to know a lot less about the underlying systems.

Forrester Research:

Look at the cost to integrate to a marketplace when Amazon began, or the early days of eBay, and even now. Those projects were in some cases hundreds of thousands of dollars. Shopping APIs streamline costs to launch a mobile site or mobile application, and really, it’s about lowering the cost to drive and expand the business. Not that you couldn’t do these things before, but it’s about making it more efficient, more readily accessible and a core part of the business strategy. An area of investment and focus, rather than a project. Interested in learning more about APIs? Please view our on-demand webinar Shopping APIs and How They Future Proof Your Business, and stay tuned for our next post.